Digital marketing for luxury brands

Joe: Hello, and a very warm welcome to the first Digital Brew 2018. We have had a bit of a winter recess, or hibernation, but I’m very happy to be here today with James Matthewson from EVRYWHERE. We’re here at the Wigmore Tavern in London, and we’re going to be talking about digital marketing for luxury brands.

James, thank you for coming along. Great to see you again. We know each other from the inaugural Econsultancy digital ski trip many moons ago.

James: Yes we do, yeah.

Joe: So we have got some very shady stories!

James: Shady and good memories from it. [Laughs]

Joe: As always with these things, I know you quite well, perhaps you could give us a quick introduction to yourself.

James: Yes. So I have been in digital for about 20 years, and specifically in luxury since 2006, so about 12 years working with global luxury brands. Primarily my world is either London, Geneva, Dubai, or the US, with a bit of Milan and a bit of Paris thrown in. So that’s where I spend most of my time.

Joe: Fantastic. And we’ll come back and talk about what you offer through EVRYWHERE later.

James: Perfect.

Joe: So yes, we have a working title of Digital Marketing For Luxury Brands. And I think this can maybe set the tone… Do you have any sort of interesting, sort of welcoming stats around luxury brands full stop and the role that digital plays within that?

James: Yes. Luxury globally is touching about a trillion dollar industry and there is – and has been for some time – a growing migration towards digital for luxury brands. It’s taken a while, it’s been a journey. I’ve been working with luxury since 2006, and I think I was one of the earliest digital people into the luxury industry. And since then, of course, we’ve seen around 10% of that global economy move into digital, so about 90 billion. And it’s continuing to grow.

Joe: Yes, and that’s an interesting… I mean, if you think 10%, there’s plenty of growth potential, so we’re still relatively early on in the journey, I guess.

James: Yeah, we are. We’ve seen, however, a bit of a flattening of the growth in digital versus the traditional retail spending, in physical. And I think they’re kind of about similar now. So, luxury brands I work with are putting anything up to 60-70 percent of their media spend and their marketing investment into digital.

Joe: Yeah. It would be fascinating to see how that’s migrated from glossy magazines and other traditional forms over the years. And there’s no doubt that the world has changed. I don’t think it’s… certainly not specific to luxury full stop, everybody has been forced to change. And I think that’s an interesting kind of question to lead in with. Why is it different? Why is luxury different to any other industry? What are the challenges that luxury perhaps face that other industries perhaps don’t?

James: Well there’s a lot of similarities, to be honest, to start with. Luxury faces a lot of the similar or same challenges as most other verticals, whether you’re automotive or pharmaceutical or FMCG. Re-culturing your organisation to be digital. Understanding the difference in planning methodologies for digital. Understanding the challenges of measurement. Understanding consumer behaviour. These are all consistent challenges whether you’re a luxury brand or you’re in another vertical. Where it’s different, however, of course is that you’re dealing with a much smaller population. When you’re talking to ultra-high net worths who are by nature nomadic. They are by nature demanding. They’re by nature information-hungry. They’re highly privacy sensitive, they don’t want to leave a digital footprint. They are fewer in number than if you’re selling mass market products. It places a lot of challenges on a luxury brand. My job has been to help my clients, which are high jewellery and high watchmaker brands, understand and navigate this complex world of digital and understand those nuances that are specific to their world and specific to their types of clients.

Joe: Yeah, I think it’s an interesting point, that kind of notion of exclusivity, it is a challenge. Because I think by… and inherently, the web is wide, You’re sort of opening your shop door to everyone and everything at all times. And that is almost sort of juxtaposed with a lot of aspirations of luxury brands who actually don’t want to be everywhere.

James: Exactly. You think about a watchmaker that’s making expensive time pieces. Their production capability and capacity is not like most other manufacturing industries. And therefore, exclusivity is also part of the brand essence and the brand attraction. And yet you’re dealing with a global medium, which is 24/7, it’s accessible to everybody. And therefore this juxtaposition of exclusivity versus accessibility is …

Joe: … Quite a cultural challenge.

James: It is a cultural challenge. I’ve worked with a lot of brand presidents in major luxury brands who don’t necessarily understand or agree with that kind of global, always on, 24/7, accessible positioning that you get with digital. So it’s been a learning curve.

Joe: That’s interesting. As an agency, Browser Media, we’ve had more kind of starter, ‘wannabe’ luxury brands. And we’ve often clashed horns, I guess. Where we’re saying, “Look, we’ve got loads of opportunities -these really good coverage opportunities – link opportunities from our world.” And a lot of the brands don’t want it because it’s too, sort of, mainstream. It’s not exclusive enough. It’s very hard when you’re trying to do SEO and build links for sites. An unknown brand, you almost welcome any opportunity. I’ve personally felt frustrated in the past. We’ve had some really good up and coming fashion bloggers, for example, who are prepared to showcase the brand, talk about the brand, talk about the story behind brand, which I think is always a very interesting angle. And the brands have said no. Because they said, “Well, Louis Vuitton aren’t in there.” Basically they want to be in this very, very high echelon, which it’s really difficult. I understand the aspiration there to protect that brand and set off on a journey that it doesn’t cheapen it, and it’s difficult.

James: It is difficult.

Joe: I think another aspect which I, again may be a personal bugbear, but over the years, how many kind of … we’re going back a long way because I’m old, but the kind of flash intro-style websites have been a nightmare.

James: Yeah. Thankfully, I think we’re past those days of doing very dense, creative work for digital for the sake of purely brand experience. And actually, I think luxury brands these days have got a very good handle on mobile optimisation. They’ve got a good handle on web optimisation, particularly if they’re transactional and they’re driving people through an e-commerce journey. Where I think the room for development exists in luxury is still overcoming some of the traditional challenges of being a multi-channel rather than an omni-channel business. So right now, you’ll have luxury brand that will sell through retail. So they’ll have boutiques. You’ll have a luxury brand that’s got brand ambassadors in a contact centre. And you’ve got a digital presence which may or may not have e-commerce. And those three have traditionally operated as silos, owned and managed by different parts of the businessunder separate P&Ls, and what you’ve got is a dysfunctional family of channels that don’t really interact or talk to each other. And where the big play is, and where I’ve spent a lot of my time helping luxury brands re-culture and re-organise, is around integrating those touch points. So now we have guided selling. I can talk to a brand ambassador for Cartier in a contact centre who can navigate me on the web through the purchase process and help me complete that e-commerce transaction.

Joe: Yeah, so there’s a proper, nice hand holding and that sort of elitist service, really.

James: Exactly. Or I can go on the Panerai website, order online, and collect in the boutique, and have that kind of blended experience of digital and physical. So we’re trying to overcome channelibalism, and we’re trying to overcome a few of those, I suppose, traditional challenges that, again, aren’t unique to luxury. They also challenge other industries…

Joe: I agree. They do. But I think, again, a kind of personal sort of viewpoints is that for luxury brands who have this sort of visual sumptuosity and experiential stuff, I think they have always had a slightly different demand to maybe a component manufacturer who wants to sell, sort of, anything, whatever it is, where they’ll focus pretty much exclusively on UX. And they’ll just make sure it’s easy to use and it works.

I think historically – and I think people like yourselves are helping these brands come over this thing – but again if I think back 10 years, it was all about these amazing, kind of immersive experience, which basically didn’t work. Because they took 10 years to download, there’s a flash variant which I didn’t have, and it actually led to more frustration than good. And I do agree with you, I think it’s now matured, and I think the mobile-first push from Google and acknowledgement that we all use mobiles, most of the big brands are actually creating really very nice experiences online. But I suspect, they’re just behind the curve of a lot of other … particularly retailers, actually. Because they don’t want to lose that elitist feel, and that unique experience, and that sort of brand aspirational… you know, let’s create something different because we are Cartier, or whatever it is. It doesn’t always translate very well online, because people have certain expectations around usability, and how it works, and all that kind of stuff.

James: Absolutely. Absolutely. And it’s a difficult remit for brand owners in the luxury space to balance this experiential delivery with the practical, functional, transactional delivery of getting somebody through the purchase process. Of course there are a lot of luxury brands who don’t sell online, and are simply sign posting people to boutiques or giving people access to a contact centre to speak to a concierge service. But for those who do transact, there’s this challenge of bringing to life the story and the brand DNA and the brand experience, but at the same time making it easy for their clients to be able to purchase.

So we’re on a journey and I’m 12 years in to working with luxury brands on this, and we’re still working on a lot of the same principles.

Joe: Yeah, I’m sure and, obviously you’re an expert in the field, to you it’s obvious. I’m sure you’re still finding barriers within these sort of mega-brands who you suspect would know better. But they’ve got in many cases a deserved arrogance, they think, “we’ve done it this way for so long, and I don’t really care what you, Mr. Digital Guy says, because that’s now how we do it. This is not how we want the brand to be.”

James: Well I’ve faced that since 2006. I was in Milan with 20 senior luxury C-suites from 15 different maisons, from 15 different brands. For 3 days, I had them in a room telling them that I believe that the world of luxury and digital would converge. That luxury wasn’t going to be exclusively all about digital, but there was going to be a big shift towards digital. And they all thought I was mad. They all said I was a mad Englishman from London who didn’t understand luxury and didn’t understand ultra-high net worths. And here we are in 2018 and we’ve seen a big shift in budget, and we’ve seen a big shift in focus from traditional media to digital media. But it’s not the only play, and I’m a massive advocate of leveraging all of the touch points that are relevant for your client and for your audience you’re targeting than purely about digital. It’s not only about digital.

Joe: Yeah, I agree. It’s a healthy attitude. And it takes out of that silo. I think if you are just digital, you’re actually encouraging the whole silo psyche which is not good. So 10%, give or take, is transacted online, but is it 40% …

James: Are influenced…

Joe: … influenced to buy online.

James: Yes, so around 40% of, let’s call it retail transactions in luxury broadly, are influenced by online, in whatever shape or form that influence might mean. It could be… I saw an Instagram post. I was with the boutique manager of the Panerai boutique in Beverly Hills, and she said she’d posted a picture of a new piece that’d come into the boutique on her personal Instagram. Within a couple of hours, a client had seen it on Instagram, called up the boutique, placed the order over the phone, and collected it the next day. And that’s influence.

Joe: Potent, isn’t it?

James: But of course the trouble with that is how do you manage that? Particularly from a HQ perspective, where the image has been posted on boutique staff personal Instagram, the client has seen it, the transaction’s happened over the phone, the boutique is remunerated on that sale, but it’s a digital-influenced transaction.

Joe: Yeah, and interesting there, it wasn’t even their own site. it was Instagram. Have you come across fear about the lack of control? So it’s imagery on Pinterest, on Instagram, Facebook, all those kind of social fires which rage, which they cannot control. They can try and influence, but that’s a real challenge.

James: That’s been another journey. And it’s continuing, because traditionally, creative has been quite conservative. If you take a watch brand, if you take a typical watch piece of advertising, it’s a watch face on a plain background with a logo – that’s it. And then what you started to see on social media was bloggers, Instagramers, developing imagery that was completely outside of the way the brand would want to present their products. And it took a few years, at least, before brands then started to engage with the bloggers or the influencers to say, “Actually, you know what? You’ve got 6 million followers on Instagram who seemingly love the way you present our products…

Joe: It’s the right demographic, it’s right audience…

James: Let’s engage with you and see. But it took them a long time to get there, because bloggers, Instagram influencers like to control the creative. They like to control the distribution of their assets. It’s their audience and it’s their platform, and it’s their creative and their tone of voice. That doesn’t sit will with the CMO of a luxury brand who’s been use to controlling the media, the creative, the message, the placement, and everything else.

Joe: I think it’s what we were saying earlier on about being forced into relinquishing some degree of control, which-

James: It’s scary.

Joe: … as a brand guardian, it’s terrifying.

James: It’s scary for them.

Joe: It’s beyond scary. It’s very much, it’s a shift. Similar to the web 1.0 to web 2.0. Web 2.0 for me is a recognition that you’re no longer in control. It’s a two-way dialogue, you need to engage, you need to listen, you need to interact, you need to respond. You can’t sit in your ivory tower and dictate in the way that, I think, literally 10 years ago, I think the kind of mega-brands, they had a carte blanche to do almost what they wanted. They set the rules, and suddenly it’s changed.  And that’s a real cultural shift.

James: It’s a cultural shift. And actually, I think that’s the heart of where we’ve been. We’ve been re-culturing a lot of luxury brands over time to understand the shift in their consumer behaviour. A lot of luxury brand senior people have been focused on products or channel and not customer. In the old days, you didn’t even know who your customer was, because you just didn’t ask. Now, we’re getting very good at knowing who our customer is, we’re getting very good data about that customer which we can translate to insight. We can use that insight to talk to them in the most meaningful way. And now it becomes less about the channel, even sometimes less about the products, and more about the client and the client experience and the expectation and what we’re going to deliver against that expectation, so –

Joe: That’s a positive thing.

James: It’s really positive.

Joe: If you take it away from the product. Products will come and go to a degree, a brand… it’s a separate episode entirely. What is a brand? I think it’s the experience of something which needs to be consistent, it needs to be, you know… we can thrash that one out. But I think if you acknowledge that the customer is key to that, I think digital allows you then to input data, and input all sorts of other stuff into that customer journey, and then to improve that customer journey. And I think there is an argument, maybe not an argument, a question mark – does online cheapen a brand? I think probably not. I think it can do, but I think if you do your digital well, then it can enhance the brand.

James: Yes. If done badly, digital can be hugely damaging, because it is always on, it is global, and you can’t hide. But if it’s done well, then it can add tremendous value. It can not only reach an audience that often can be difficult or costly to reach, so it can achieve that in an economical way, but it can also reach audiences that maybe you traditionally wouldn’t have been able to reach because you were targeting the top 1% of global wealth, and now actually you’ve got this younger millennial audience who are aspirational and are working towards wealth. Wealth, of course, is migrating south by about a decade. Wealth was older money, now that’s moving to the younger audiences, so millennial luxury buyers are a key consideration. And of course they’re big digital users. And then we’ve got-

Joe: Yes absolutely, their level of expectation around what you should be doing as a brand… they now wear the trousers in that relationship. You have to accommodate their expectations, their way of interacting with a brand. But I think that’s a positive thing, I think the brands will survive and prosper, you know, the ones that properly embrace it and enjoy it, rather than feeling threatened by it.

James: Yeah, and again, that’s part of that re-culturing exercise is to kind of help CMOs, CDOs, CEOs of luxury brands understand that actually this isn’t a threat, this is a great opportunity, and if we can tie our channels together we can create an integrated experience.Whether or not you have a millennial or you have an ultra-high net worth Chinese consumer who wants to research online and buy in boutique, or they want to research in boutique and convert via e-commerce, my argument is it doesn’t really matter.

Joe: I agree.

James: We should just provide the mechanism to make it happen for the consumer. And we win.

Joe: It’s the customer is king mentality, which actually, I think that’s a positive thing. You can still be elitist, but acknowledge the needs and expectations of a modern audience. And that’s a good thing.

James: Absolutely. Absolutely.

Joe: So again, when I think of luxury premium brands, a lot of is experiential, it’s beautiful, it’s sumptuous. ROI might not necessarily be the obvious thing that you imagine these brands are actually focusing on. In your kind of world, how much of the focus is demonstrable ROI versus part of the overall brand beauty and all that kind of stuff.

James: If you’re doing brand building, there’s ROI. If you’re doing e-commerce and therefore it’s more direct response driven, there’s ROI.

Joe: Easier ROI.

James: Easier ROI. But there’s ROI across all of it. And I think luxury brands are no different to FMCG in that respect. There is an investment, and that investment has to demonstrate a return. However, it can be difficult, because traditionally, if I had been influenced by online to go to a boutique and purchase, that purchase might not necessarily be captured as being influenced by online. Of course there are technologies now that help us to solve that problem technologically, but traditionally …

Joe: It’s that old attribution modeling question, which we’re scraping the surface of that one, so it’s very difficult.

James: We are scraping the surface of it. And luxury has been another latecomer to that opportunity. But ROI is key.

Joe: Is that the case? Again, it’s very hard not to sort of think everything through your own eyeballs and small brain, but a lot of the… I always think of Christmas fragrance advertising, I just think it’s utter bonkers madness. These… just rubbish ads, which somebody somewhere must think they serve a purpose and they’re… how they begin to start measure ROI on that kind of exercise, I just don’t know. And I would like to think that digital will allow them to do more. So, yes, create the same creative, fine – but let’s measure it. Let’s see how many people viewed it, let’s see what they did after, let’s try and… for the brands that don’t sell online, how do we try and measure it? Is it beacons? Whatever it is. 

James: Often it’s just simply uplifting sales during that period of the TV impacts that they’ve delivered. But I think what’s really clever is when you get a brand that has… like Burberry’s head of music will choose a soundtrack for their TV advertising for, say, a Burberry fragrance that will be Shazamed ‘X’ many times and it will appear in the top three or five positions of the Shazamable charts. And you start to go, wow, actually what’s happening is people are seeing my TV ad and they love the soundtrack that’s going with that piece of creative, and they’re Shazaming it, which is then giving me an opportunity to present them with a piece of creative. And I think then you can tie offline and online together beautifully if you think it through. And that’s where you can start to see ROI.

Joe: That’s good. So EVRYWHERE, how did that become… what services do you offer?

James: So like a lot of my career, all happened by accident.

[Both laugh]

Joe: Best things are!

James: I was invited in 2006 by Richemont, based in Geneva, to go to Milan to their creative academy to work with 15 maisons on digital, with a relatively open brief to sort of educate and inspire these 20 seniors from 15 brands around digital, and really that’s where it evolved from. And today, EVRYWHERE is operating globally with luxury brands across the US, Middle East, and Europe, primarily. We work with lots of watch and high jewellery brands, we work with fashion and accessories, we work with auto brands. And we provide a range of services from mentoring and consulting, to training, which is probably what I’m best known for, to running ultra-high net worth experiences here in London. We run some private dining events where technology businesses want to meet luxury brand…

Joe: A matchmaking service.

James: … CMOs, CDOs – a little bit like a matchmaking service. We’ve just launched our Disrupt Luxury podcast, which we’ll start producing shortly. And then next year we have a book called Digital Marketing For Luxury Brands coming out. That’ll come out roughly around the autumn of 2019, so there’s a lot going on.

Joe: A lot going on.

James: A lot going on.

Joe: Busy man!

James: Yeah.

Joe: And how do people get in touch with you? What’s the best way of …

James: Best way is LinkedIn. Find me on LinkedIn. Website, of course, evrywhere.tech. Or you can Tweet me, text me, IM me, Facebook me, FaceTime me, LinkedIn me, WhatsApp me, WeChat me.

Joe: Everything me!

James: Pretty much every social platform you’ll find me on. [Laughs] So I’m fairly easy to find!

Joe: Good. And traditionally we always like to finish on a kind of “what next?” You know, what’s the next big thing? So as a kind of parting shot, what’s the next big thing in digital marketing for luxury? Or maybe its consolidation. And maybe a tip. If you’re a luxury brand, what’s the big thing to focus on for the next one to three years?

James: Great question. I think there’s, again, most industries there’s a lot of excitement or chatter around some of the emerging tech. AI gets a lot of air time. Chatbots gets a lot of air time, and some of the brands I work with have implemented chatbots, say, on their Facebook Messenger platform or their websites. VR and AR, I think, is coming of age. Visual search, I think is very interesting, particularly when you’re in a high quality product environment. Voice search is also interesting. But I think all of those things are interesting. For me, where the real play is is almost, now we’ve been on that journey of adopting and understanding digital, is really deeply integrating it into the business. So that this idea of ‘omni-channel’ becomes a reality rather than just a bit of lip service.

Joe: I think that’s an excellent thing. And I think it’s using the data that online digital generates to inform all sorts of stuff.

James: And we have an abundance of data.

Joe: Exactly, that’s what we’re good at.

James: And what we’re trying to do now is we’re trying to work with, say, brand ambassadors in our contact centers to say all the information in your head about your clients, that needs to be in CRM. All that interaction on digital touchpoints needs form part of CRM. All that boutique interaction needs to be on CRM so that we can start to build a rich picture of clients and we can start to deliver a much more personalised and relevant experience to them. Which is not traditionally how we’ve done things in luxury, we’ve just not asked for the information. 

Joe: I’d agree. And I think that’s a positive theme to end on is it’s actually, ironically as we are both digital bods, it’s actually stepping out of digital and properly cementing digital into the entire business and the culture of organisations, which sounds obvious but it’s hard to do.

James: I teach on a luxury Master’s in Geneva with a business called CREA and one of the things I tell all the students there – and I’ve got some really bright students who are sitting a two year luxury Master’s programme – I tell them this is about economics. It’s not about digital and it’s not about technology, this is about business. And if you get under the skin of the numbers, then that’s the greatest place you can start from, because everything else is a bit of a wraparound, but if you understand the business and you understand the numbers and the economics of it, then you understand the business.

Joe: It’s easy.

James: Easy-ish.

[Both laugh]

Joe: James, been great speaking to you.

James: Joe, pleasure. Thanks so much.

Joe: That’s it for this episode. Hope you enjoyed that. As always, we welcome any feedback you have, so… actually, we don’t have any comments on YouTube, but leave comments on our blog. And if you’d like to get involved with the future Digital Brew, we’ve love to hear from you. Thank you very much.